The spectre of financial meltdown returned to British football on Monday after Rangers and Portsmouth both applied to be placed into administration.

Rangers, one of the game's great institutions and by far the biggest club to have their existence thus threatened in the modern era, have claimed they are facing a tax bill of "substantially more than £50m" after lodging papers confirming the move in Edinburgh on Monday The club are virtually certain to appoint an administrator to take control of affairs at Ibrox within the next 10 working days.

Meanwhile Portsmouth revealed they would on Friday apply for similar status to avoid a winding-up order from the taxman, less than two years after they infamously became the first Premier League club to enter administration, owing more than £120m.

If the application is granted on Friday, it will lead to the club's bank accounts – frozen in light of an outstanding £1.2m tax demand – being made available and some pressing outstanding payments, including an overdue electricity bill, to be made. The players and staff have not been paid since Christmas.

Rangers have been involved in a tribunal with Her Majesty's Revenue and Customs, relating to historic employee benefit trust payments to players. The Rangers owner, Craig Whyte, claimed last night that the potential tax bill could be as much as £75m, including penalties. The administration move has been made before the outcome of that tax case has been published.

On the specifics of the tax issue, Rangers said: "The tribunal relates to a claim by HMRC for unpaid taxes over a period of several years dating back to 2001, which, if decided in favour of HMRC, could result in liabilities and penalties substantially more than the £50m reported which the club would be unable to pay."

Whyte said: "Since I took over the majority shareholding of the club in May last year, it was clear to me the club was facing massive financial challenges both in terms of its ongoing financial structure and performance and the potential consequences of the HMRC first tier tax tribunal.

"I have taken the decision that the most practical way to safeguard the long-term future of the club is to go through a formal restructuring process. It may still be possible to avert this but that is not the most likely way forward."

In a separate release, Rangers proposed the club enter a company voluntary arrangement whereby their creditors agree to be repaid a reduced sum, but only if the tax authorities agreed to a moratorium on the £50m-plus potentially owed. "The club wishes to seek the protection of a moratorium from HMRC action whilst a CVA proposal is made to creditors," the statement read. "Should the club proceed into administration, the appointed administrators will in all likelihood implement a cost-cutting programme and staffing levels will be reviewed across all departments of the club's business."

As and when an administrator arrives at Ibrox, Rangers will incur a 10-point penalty from the Scottish Premier League. Any subsequent punishment depends on the CVA being accepted by the required 75% of Rangers' creditors. HMRC have proved inflexible with football clubs in the recent past but will recognise the threat of receiving no return whatsoever if Rangers are plunged into liquidation.

The Portsmouth chief executive, David Lampitt, said the club was left with no choice but to apply for administration to protect its creditors after the former majority shareholder Vladimir Antonov was arrested for alleged bank fraud in late November. He told the BBC that entering administration would convince potential buyers to come forward and agree a CVA that would save the club.

Antonov's arrest led to renewed questions from Portsmouth fans over the Football League's fit and proper persons test. Lampitt said last night that the club had already been "brought back from the brink" once. UHY Hacker Young, who have been searching in vain for a buyer as administrators of Antonov's former company CSI, are likely to take over as administrators of the club if the court order is granted on Friday. "We have made the order because we've got to the position where it's absolutely necessary to do that to protect the club and protect our creditors," said Lampitt.

Whyte, meanwhile, was jeered by supporters as he addressed them outside Ibrox. He said: "From my early days as chairman I saw that administration was a very real option to enable the club to address these challenges and make a fresh start. Frankly, the case for administration in pure financial terms was compelling but I was acutely aware that such a great institution as Rangers could not be viewed exclusively in financial and business terms.

"As I have said before, Rangers costs approximately £45m per year to operate and commands around £35m in revenue. From the outset I have made it clear that I do not think it is in the best interests of Rangers to throw good money after bad."